December 7, 2011
By Mark D. DeBofsky
Mark D. DeBofsky is a name partner of Daley, DeBofsky & Bryant. He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage, and Social Security law.
A recent ruling issued by a federal court in California illustrates a number of critical issues involving a claim for disability benefits due to chronic fatigue syndrome.
In Peterson v. AT&T Umbrella Benefit Plan, 2011 U.S.Dist.LEXIS 135285 (N.D.Cal. Nov. 23, 2011), the court overturned a benefit termination involving an employee of AT&T. The case involved Judi Peterson, who began her employment as a telephone operator in 1988 when she was 18 years old. Peterson continued working for AT&T until April 2006, when she needed to stop working due to chronic fatigue syndrome. After receiving short-term disability benefits for 52 weeks, Peterson's claim was assessed for long-term consideration. Although the claim was initially denied, Peterson successfully appealed and was approved following a reviewing doctor's determination that the claim was supported. Peterson was also successful in securing Social Security disability benefits with the assistance of Allsup Inc., a vendor retained by AT&T. Successive annual reviews thereafter confirmed Peterson's disability.
However, in 2009, a follow-up file review questioned the plaintiff's ongoing disability and benefits were terminated as of Aug. 1, 2009. Peterson again appealed, reporting the same symptoms as previously reported and providing physician reports documenting no change in her condition. In addition, Peterson responded to assertions about her acting as a foster parent and whether such activities were inconsistent with her claimed disability. Peterson explained that she remained very symptomatic, but had offered emergency foster care while trying to start a family of her own. She concluded her appeal by remarking, "There aren't any rules I know of that state a person cannot attempt to start a family while disabled." Although Peterson's doctors were consistent and unequivocal in their support of her disability, Sedgwick, the plan's administrator, retained three file review doctors who questioned the ongoing disability and the benefit termination was upheld.
Although the court rejected the plaintiff's argument in the ensuing litigation that AT&T was a conflicted fiduciary since AT&T delegated its authority to make benefit determinations to Sedgwick, the court refused to equate ERISA's deferential standard of review to a rubber stamp and explained the decision would be overturned if the plan administrator: "1) renders a decision without explanation, 2) construes provisions of the plan in a way that conflicts with the plain language of the plan or 3) relies on clearly erroneous findings of fact." The court also found that clear error is present where "the reviewing court is left with the definite and firm conviction that a mistake has been committed. " (citations omitted). The court also cited Salomaa v. Honda Long Term Disability Plan, where the 9th U.S. Circuit Court of Appeals added that discretion is abused where the determination is "1) illogical, 2) implausible or 3) without support in inferences that may be drawn from the facts in the record." 642 F.3d 666, 676 (9th Cir. 2010).
Applying those standards, the court found the plan administrator abused its discretion "because [the termination] was illogical and without support in inferences that may be drawn from facts in the record." The court cited five reasons supporting its conclusion:
"1) The plaintiff was initially found to be disabled on the basis of [treating doctor] reports documenting the plaintiff's symptoms associated with chronic fatigue syndrome and [the treating doctor's] updated reports reflect that the plaintiff's symptoms remained unchanged; 2) [ ] LTD benefits [were terminated] based in part on the absence of "objective documentation of any internal medicine restriction' when it is undisputed that there are no objective tests for chronic fatigue syndrome; 3) [Sedgwick] relied, in part, on the conclusions of the transferrable skills analysis, which was itself based on [a reviewing doctor's] incomplete review of the record and erroneous belief that the plaintiff had been working full-time for many months; 4) two of the three physicians who conducted a paper review as part of the appeals process, Dr. Polsky and Dr. Sonne, did not meaningfully address the plaintiff's chronic fatigue syndrome and the third, Dr. Maslow, found that the plaintiff did not suffer from chronic fatigue syndrome at all - a finding that the defendants now concede is incorrect; and 5) [Sedgwick] failed to engage in a meaningful dialogue to the extent that its denial was based on the plaintiff's efforts to conceive or adopt, including her fostering of three infants, but IDSC failed to seek any medical opinion from [the treating doctor] specifically addressing the implications of this activity for determining whether the plaintiff's CFS continued to render her totally disabled."
Critical to the court's determination was the absence of any change in the plaintiff's condition. When the benefits were approved, she was under the care of the same physician who was treating her when benefits were terminated. Since that doctor continued to document the same symptoms, the court found it illogical for the plan to have terminated benefits without a significant change in condition. The court also relied heavily on Salomaa for its conclusion that the plan may not deny benefits based on a lack of objective medical evidence of chronic fatigue syndrome since it was undisputed that there are no objective medical tests for CFS. Thus, the court reinstated the benefits.
Chronic fatigue syndrome cases are difficult, both as to the plans' ability to assess the impairment as well as for the claimants to prove disability on account of that condition. And the claimant's burden is even more difficult due to cases such as Williams v. Aetna Life Ins.Co., 509 F.3d 317 (7th Cir. 2007), where the court ruled the claimant need not provide objective evidence of a chronic fatigue syndrome diagnosis but is required to furnish objective proof of functional limitations. However, such evidence is difficult to obtain since there is no reliable physical testing available that would objectively measure functional limitations due to CFS. Nonetheless, the consistency of the record, such as the one here, offers convincing proof.
The plan's argument about travel and fostering children surprisingly received little discussion in the court's opinion. It could have been a potent argument against the claimant had it been raised earlier in the claim process since religious missions to other countries can often be strenuous and fostering children may be especially demanding. However, in cases such as Ettel v. Unum Life Ins.Co. of America, 2008 U.S.Dist.LEXIS 103419 (W.D.Wash. Dec. 10, 2008), witness statements about the claimant needing to lie down during travel weakened the potency of the plan's argument that travel was inconsistent with disability. And Caplan v. CNA Financial Corp., 544 F.Supp.2d 984 (N.D.Cal. 2008) ruled that the disabled may even be able to go on a vacation and still be deemed disabled since even a long flight to India could be accommodated. However, in Robyns v. Reliance Standard Life Insur.Co., 2003 U.S.Dist.LEXIS 13682 (S.D.Ind. July 10, 2003), the court pointed out that traveling to craft shows and taking adventure-travel vacations were inconsistent with a disability similar to CFS. Also of note is that in Gentle v. Barnhart, 430 F.3d 865 (7th Cir. 2005), the court determined that the ability to perform household chores and child care do not equate to the ability to work.
However, the issues highlighted by the court are of crucial importance in cases such as this where it is impossible to produce laboratory or imaging studies to corroborate a claimed disability. Terminating benefits after a lengthy period of benefit payment without any evidence of medical improvement has to raise questions. And the failure to have the claimant examined, coupled with the plan's reliance on reviewing doctors who appeared to have deliberately ignored the primary disabling impairment, also gave the court substantial reason to overturn the benefit termination.
Note: Our firm represented the plaintiff in the Williams v. Aetna case mentioned in this article.